Right for all you out there saying WMV is better - I did a direct comparison:
Vegas project settings = Identical.
WMV render settings are 14M internet bit @ 1080P.
Whilst comparing MP4 and WMV video wise it was apparent that WMV had a slight blur around the texts (as in they weren't as sharp)
Upon close analysis, and print screening the two, I found that MP4 was the better output for PVR2 recordings.
More so, Vegas had some initial problems with outputting WMV files for some reason "memory low" error occurred.
Long story short - use MP4 to render if you are using the PVR2 - simply as that's the INPUT, it might as well be the OUTPUT. YouTube has no problems with either of them.
It should be noted that WMV was faster to render (although I had a mini clip).
Please bear in mind the below are print screens @1080P - not a great quality image (and not at the exact time), but if you try looking closely enough at the static text (ignoring blur and motion on the crossbow) you'll be able to see the Totally Dubbed and [XBOX] are clearer by a little margin on MP4 - might not seem apparent, but when you full screen it whilst the video is playing you'll bear able to distinguish the difference almost instantly.
WMV:Edited by Totally Dubbed - 12/11/12 at 5:09am